Vodafone, RIM CEOs sound alarm over wireless data crisis

Vodaphone's CEO told the crowd at MWC that despite offering growth in the …

Vodafone CEO Vittorio Colao took to stage at Mobile World Congress is Spain this week to warn that smartphones—representing the only growth proposition in mobile phone sales—will soon begin to outstrip wireless networks' capacity to send and receive data. While chipmakers, handset makers, and services providers are all cashing in on the growth, mobile carriers are left trying to "cope" with the growing demand for data from increasingly data-hungry phones.

Echoing comments from AT&T Mobility CEO Ralph de la Vega late last year, Colao said that new business models need to be created to enable carriers to invest in improved network infrastructure while still earning profits. In effect, Colao is saying that users should be charged more for using more data. Also, he seems to be pointing a finger at Google—though it's not clear why—saying that its hold on a large majority of the search and mobile ad business needs to be "looked at," according to Reuters.

These concerns stand in stark contrast to statements made by Vodafone as it became an official iPhone carrier in the UK. While original exclusive carrier O2 had problems meeting network demands of its iPhone users and issued an apology, Vodafone took the opportunity to brag that it was ready to handle any increase in traffic from new iPhone users.

However, Research in Motion's co-CEO, Mike Lazaridis, agrees there is call for concern. "Manufacturers had better start building more efficient applications and more efficient services," Lazaridis told Reuters recently. "If we don't start conserving bandwidth, in the next few years we are going to run into a capacity crunch. You are already experiencing the capacity crunch in the United States."

iPhone users in densely populated areas aren't strangers to spotty service, but sources tell Ars that the problem isn't related to data capacity as much as it is related to capacity to handle the growing number of data devices. And though iPhone users may typically use more data on average than Blackberry users, our readers tell us that the vast majority are using under 1GB of data per month, almost 60 percent below 250MB per month.

Ultimately, if wireless carriers aren't making enough money to cover the costs to operate their networks, it seems like a problem of their own making. In the US at least, customers have exactly one option for data services from almost every carrier: about $30 per month for "unlimited" data use. If wireless capacity is as scarce as Colao would like us to believe—the FCC has expressed similar concerns over wireless spectrum in the US—then it only stands to reason that pricing should be related to the amount of data being used.

Tiered or metered pricing may be options that carriers might use in the future, but customers were sold on unlimited plans. It seems as though wireless carriers have, in an attempt to lure smartphone customers that generate higher average revenues, over-promised and under-delivered.